4 JAL directors ask CEO to quit over poor performance

The chief, Toshiyuki Shinmachi, did not accept the demand, a spokeswoman says

By Masumi Suga
Bloomberg News

Toshiyuki Shinmachi, Japan Airlines Corp.'s chief executive since April last year, has been asked by four of the carrier's 10 directors to quit and take the blame for poor performance, said a company spokeswoman.

Shinmachi, Executive Vice President Katsuo Haneda and Senior Managing Director Hidekazu Nishizuka were asked on Friday to step down, the Tokyo-based carrier's spokeswoman Yuko Takahashi said today, declining to name the four directors who made the demand.

Shinmachi, promoted to the top job at Japan's largest carrier less than a year ago, has been under pressure to improve Japan Airlines' safety record, cut costs and boost earnings. Passengers defected to All Nippon Airways Co. after reports of at least 14 safety lapses last year, pushing Japan Airlines' third-quarter loss to triple to $93.6 million.

Japan Airlines is likely to report a loss in the fiscal year ending March 31, the carrier said last week. All Nippon reported its third quarter of net income on Jan. 31 and raised its full-year profit forecast by 70 percent, as it won more customers from Japan Airlines and hedged fuel costs.

Shinmachi did not accept the demand to quit, spokeswoman Takahashi said today.

Friday's call for Shinmachi's resignation came three days after Japan Airlines' biggest individual shareholder urged him to quit.

Eitaro Itoyama, a member of Japan's parliament during the 1970s and 1990s and a 4 percent shareholder of Japan Airlines, said he could no longer accept Shinmachi's leadership because of the carrier's slow pace of improving its business, according to a statement last week on his personal Web site.

Itoyama, 64, made a similar demand eight years ago for then-President Isao Kaneko to quit and take responsibility for declines in revenue and profit. The billionaire, one of Japan's wealthiest men according to Forbes magazine's 1998 ranking, successfully demanded the removal of Japan Airlines President Akira Kondo and Chairman Susumu Yamaji in March 1998 with complaints about losses in the carrier's hotels and resorts.

Japan Airlines embarked on a program to sell some of its vacation properties after 1998.